Mr BUCHHOLZ (Wright) (10:35): The Superannuation Legislation Amendment (MySuper Core Provisions) Bill 2011 follows the Cooper review into Australia's superannuation system and has the aim of introducing a new low-cost superannuation product, known as MySuper, to replace existing default superannuation fund products, as outlined in the superannuation system review of 2011. Specifically, the bill defines what a MySuper product is and sets out rules for payments, contributions and account transfers for MySuper products. It also sets out the fees which can be charged and the basis on which those fees can be charged to members of a MySuper fund. The coalition has been consistent in supporting changes to the superannuation system which make it more efficient, more transparent and competitive, with the ultimate objective being to improve the value of super funds for members.

Under the bill, from 1 October 2013 employers will have to make default superannuation contributions for employees who have not chosen a fund which offers a MySuper product. However, I note today that the government has chosen to introduce last-minute amendments to push the date out to 1 January 2014. Why should we be surprised at anything that comes from this Labor government, a government which has refused to open the default fund market to competition and choice?

The bill contains a number of what many Australians would deem minuscule changes. However, each one of these changes is important and I want to make sure the people of Wright, whom I am proud to represent, get the best possible deal. I support constructive, healthy changes which make our superannuation system more efficient, transparent and competitive and thus improve value for super fund members. As members have heard me say before, it is critical that appropriate policies be implemented for the benefit of the Australian people—I speak specifically for the people of my electorate of Wright—who want a government which can lead and support them, and it is our duty to make sure that we get it right. The best way to maximise value for consumers across all parts of superannuation—and the value proposition includes fees, fund performance and service—is to maximise competitive tension in an appropriately transparent system.

The first point I want to make is about implementation. I do not believe that any member on this side of the House is surprised that the bill seems rushed, disorganised and poorly constructed. The initial MySuper proposal, to design a superannuation product and impose pricing through legislation, would have created unnecessary inefficiencies and left many consumers worse off. Research from well-known superannuation consultants Chant West found that the originally proposed version of the bill was going to mandate that only a particular fee level could be charged. Some 750,000 Australians would have been forced to pay higher fees than they were then paying. The coalition is certainly pleased that the government has decided to back away from that approach.

Unfortunately, the bill mandates that from 1 January 2014—if the government amendments are successful, of course—employers can make default superannuation contributions to MySuper products for employees who have not chosen a fund. That is, while every default fund has to be a MySuper product, not every MySuper product will be available as a default superannuation fund. The decision about which funds are selected as default funds will be made through a secretive, non-transparent and non-competitive process which will remain with Fair Work Australia. Given Fair Work Australia's performance in recent times—I refer to delays of up to four years, in some instances, on union issues—I do not trust Fair Work Australia to deliver outcomes on this in an appropriate time frame.

I recall that in August 2010 Labor promised, in addition to their other promises, that an elected Gillard government would ask the Productivity Commission to design a transparent, evidence based and competitive process for the selection of default funds under the modern awards. Unsurprisingly, that promise has also not been fulfilled.

The regime to be introduced in this bill only negatively adds to the uncompetitive idea of the current modern award system as it applies to competition in the superannuation sector. Given the consumer safeguards prescribed by MySuper products under this legislation, any MySuper product should be available for selection by any employer as a default fund to make default super contributions for employees who do not have a chosen fund. Unfortunately, the government has failed to take this opportunity to expand the range of default superannuation funds that employers can choose to make contributions to. The government should act to fix this issue by removing the need for Fair Work Australia to select which MySuper products can be used as a default fund in each award.

It is of no consequence that these arrangements are to the advantage of the industry funds and public sector funds, and it is those funds that are closely aligned with—you guessed it—the union movement. It seems that each bill brought to the House by Labor has three motives: it gives more support to its union buddies; it puts its hands in the pockets of mums and dads, looking for new taxes; or it somehow manages to get an increase from the Public Service sector. This bill just looks after union mates.

I want to highlight briefly the failure of competitive neutrality in the way that intra-fund advice is treated. The explanatory memorandum indicates that a superannuation fund would be able to charge for expenses incurred in the provision of intra-fund advice as part of its overall administration fee charges to fund members of a MySuper product. Intra-fund advice is a term commonly used to describe financial advice that a superannuation fund provides to its members. This advice fee would not only be bundled into an administration fee but also be charged to all fund members, irrespective of whether they access such advice. I cannot think of any situation in the commercial world where you would be charged for not asking or receiving anything. It is quite hypocritical.

The provision for the intra-fund advice has been included by the Minister for Financial Services and Superannuation. This hidden fee or secret commission is completely inconsistent with the changes the government is seeking to impose on small business financial advisers under the FOFA. The coalition's proposed amendments to this bill ensure that no fees for personal financial advice can be bundled into an administrative fee for the purpose of a MySuper product and charged to the fund members irrespective of whether they access the service or not.

The Australian people want and need to be given every opportunity to face the challenges that lay ahead. With this bill they want good policy that proves to be beneficial to their super and keeps the economy strong. We do not want to see mums and dads and hardworking business owners—everyday Australians, like the hardworking families in my electorate of Wright—left behind. This is what will happen if we do not make every effort to work together to get an effective policy.

Unfortunately, this proposed super­annuation legislation amendment, MySuper Core, once again puts forward the government's inconsistent approach to its selection of default funds. Australians—more specifically, the people of Wright, whom I represent—have the right to know the basis upon which default funds are selected. MySuper funds should, according to the government, provide cost-effective measures for employers. However, if this system does not perform to that standard then it is the members who will suffer, because it is their money, the money they are counting on to support them later in retirement, which will end up going towards more administration costs.

This government has a duty to protect the Australian people. By hiding behind Fair Work Australia's approach to the selection of default funds and adopting a lazy attitude to honesty and transparency, they are only accentuating their own attitude to healthy, productive policy. That goes without saying. It is an act that my constituents in the electorate of Wright can see straight through.